Gov orders more state furloughs

BUDGET

Published 4:00 am, Thursday, July 29, 2010

Citing an impending cash crisis, Gov. Arnold Schwarzenegger ordered furloughs for 156,000 state employees Wednesday, a move union leaders called a thinly veiled attempt to pressure their members and the Democratic-led Legislature into accepting his budget demands.

The order, which requires the employees to take three unpaid days a month, takes effect Sunday - one month after the expiration of a previous furlough order that covered more workers.

The new order covers about two-thirds of state employees but exempts members of the six bargaining units that have reached tentative agreements with the Schwarzenegger administration, as well as employees of revenue-generating agencies such as the Franchise Tax Board.

The Republican governor said the furloughs will end the minute a budget deal is reached, but that they are necessary to avoid the issuing of IOUs, as occurred last year. His spokesman said the furloughs would save the state $147.2 million a month, but only $80 million of that savings would come from the state's general fund, the primary spending account that faces a $19 billion deficit.

"Without a budget in place ... every day of delay brings California closer to a fiscal meltdown," Schwarzenegger said in a written statement. "Our cash situation leaves me no choice but to once again furlough state workers until the Legislature produces a budget I can sign."

Public employee union leaders, however, say the order is a blatant political stunt. Professional Engineers in California Government Executive Director Bruce Blanning said if the order were really about cash flow, the governor would have included all employees paid out of the general fund. And Yvonne Walker, president of Service Employees International Union Local 1000, which represents about 95,000 state workers, said it is "absolutely a political calculation" designed to put pressure on lawmakers.

"This is just to put pressure on the unions that haven't agreed with his program. If you agree with him, there are no furloughs," said Blanning, who represents about 11,000 engineers at Caltrans and other agencies. "His people told us on conference call earlier (Wednesday), 'When they pass a budget, the furloughs will end,' so this is clearly aimed at putting pressure on the Legislature as well as state employees."

Assembly Speaker John Pérez, D-Los Angeles, also slammed the move, saying it "deliberately hurts people." He compared it to the governor's attempt to reduce state workers' salaries to the federal minimum wage until a budget is in place, a move that has been blocked by the courts.

"Every decision he's made has been designed to punish working families," Pérez said in a written statement. "It would be a refreshing change if for once he could make a decision that helps the economy rather than hurts it."

The fiscal year began July 1, but the governor and lawmakers have yet to agree to a budget plan. Schwarzenegger has said that he will not sign a budget unless it includes reforms, including to state workers' pension benefits. This week he warned that the budget deadlock could drag into the next governor's term.

The statement prompted Controller John Chiang, a Democrat, to issue a warning of his own: Without a budget in place, Chiang said, the state will run out of cash by the end of October, and he would have to begin issuing IOUs as soon as late August.

Last fiscal year, the governor furloughed about 200,000 state employees for three days a month, a move that amounted to about a 14 percent pay cut. Both this year and last, Schwarzenegger exempted two public safety agencies from the order - the California Highway Patrol and state firefighters - but included prison guards.

The furloughs have been controversial from the beginning, particularly because the governor previously had refused to exempt employees paid from sources other than the general fund or those who make money for the state.

A number of unions sued last year, arguing that the governor does not have the authority to unilaterally impose the furloughs. The state Supreme Court has agreed to hear the cases; if the court rules in the unions' favor, the state could be liable for back pay.

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